Daily SITREP: Credit Rating Cuts for More Regional Banks (Wed, 23 August 23) – Forward Observer

Daily SITREP: Credit Rating Cuts for More Regional Banks (Wed, 23 August 23)


Good morning. Here’s your Daily SITREP for Wednesday, 23 August 2023.


  • READ TIME: 4 Minutes, 38 Seconds
  • Inside the Beltway
    • (1) Senate Planning Stopgap Bill to Get Ahead of Shutdown
  • Domestic INTSUM
    • (2) Trump Maintains Lead in Key Primary State Iowa
    • (3) Credit Rating Cuts for More Regional Banks
  • Global SITREP
    • (4) Report Warns of Two-Front War in Pacific
    • (5) Medvedev: Russia May Annex Georgian Breakaway Regions
    • (6) African Union Political Bloc Suspends Niger
    • (7) United Nations Says Taliban Conducting Revenge Attacks
    • (8) BRICS: Xi Skips Speech on Chinese Economic Strength


  • (1) SENATE PLANNING STOPGAP BILL TO GET AHEAD OF SHUTDOWN: Democrats and Republicans in the Senate are considering if it is feasible for the Senate to move first to pass a Continuing Resolution (CR) ahead of a possible government shutdown on 01 October.
    • Why It Matters: Spending bills typically originate in the House due to Constitutional requirements, so the Senate is searching for a legislative vehicle for a CR. This is a sign the Senate is taking the threat of a shutdown seriously by trying to decrease the time it takes between the passage of a CR in the House and the debate and passage in the Senate. – R.C. 


  • (2) TRUMP MAINTAINS LEAD IN KEY PRIMARY STATE IOWA: According to a new NBC News and Des Moines Register survey, 51% of likely Republican caucus goers believe former President Donald Trump’s claims that the 2020 election was stolen, and 42% said Trump was their first choice among the Republican primary candidates.
    • Meanwhile, Republican presidential candidates will square off at tonight’s debate, hosted by Fox News. Political observers say this could be a make-or-break performance for Florida Governor Ron DeSantis and an opportunity for lesser-known candidates like Vivek Ramaswamy to take more of the spotlight.
    • Why It Matters: National polling is giving Trump an insurmountable lead in the primary, which holds true for the first primary in Iowa scheduled in January. The civil and criminal prosecutions targeting Trump are hardening his support with the Republican base rather than causing Republican voters to flee to another candidate. General election polling has Trump and President Biden neck and neck and has Trump ahead of Biden in Iowa. – R.C.
  • (3) CREDIT RATING CUTS FOR MORE REGIONAL BANKS: S&P Global cut its credit ratings and outlooks for multiple U.S. regional banks.
    • Affected banks include Associated Banc-Corp, Comerica Bank, KeyCorp, River City Bank, S&T Bank, UMB Financial Corp, and Valley National Bancorp.
    • S&P Global cited higher funding costs, large deposit outflows, and more stress in commercial real estate as reasons for the credit cuts.
    • Why It Matters: Borrowing costs for these regional banks will rise, and the banks are now more likely to consolidate or close. Widespread regional banking closures could trigger a financial crisis. – H.B.


  • (4) REPORT WARNS OF TWO-FRONT WAR IN PACIFIC: A new report from the Atlantic Council warns of a possible two-front war with both China and North Korea.
    • A two-front conflict could emerge from simultaneous uncoordinated reactions to tensions with the U.S. in the region.
    • The report recommended the U.S. prepare to defeat North Korea while fighting a separate conflict with China.
    • Why It Matters: North Korea has already pledged allegiance to the Eastern Alliance of China-Russia, and any conflict in the northeast Pacific would likely trigger a response from Pyongyang. U.S. efforts to strengthen its relationship with South Korea and Japan can mitigate this threat. However, a nuclear engagement, regardless of size, could embroil the region in an expanded full-scale war. – M.M.
  • (5) MEDVEDEV: RUSSIA MAY ANNEX GEORGIAN BREAKAWAY REGIONS: Russia’s former president and current Deputy Chairman of the Russian Security Council, Dmitry Medvedev, said on Monday that Russia may annex Georgia’s South Ossetia and Abkhazia regions.
    • Both regions are considered breakaway republics, with majority Russian-speaking populations, that declared independence from Georgia in the early 1990s.
    • Why It Matters: Medvedev is likely floating trial balloons for a future Kremlin initiative. If Russia defeats Ukraine and, by proxy, its NATO patrons, expect it to flex into other occupied territories like those in Georgia, Moldova, and potentially the Suwalki Gap for overland access to Kaliningrad.  – M.M.
  • (6) AFRICAN UNION POLITICAL BLOC SUSPENDS NIGER: The African Union announced on Tuesday that it suspended the country of Niger until an “effective restoration of constitutional order.”
    • The Executive Council of the 55-nation bloc is demanding Niger restore its pro-Western president Mohamed Bazoum.
    • Earlier on Monday, the African Union threw its full support to the ECOWAS alliance in its threatened move to use military force to oust Niger’s new government.
    • Why It Matters: France is pushing ECOWAS to execute a military operation against the new Niger junta. On Monday, Algeria denied use of its airspace for French aviation support to ECOWAS. The U.S. is trying to calm the waters to avoid a conflict that could pit much of West Africa against its former colonizer, France, and its African client states. Notably, Burkina Faso began dispatching military forces to its ally in Niamey in anticipation of an attack. – M.M.
  • (7) UNITED NATIONS SAYS TALIBAN CONDUCTING REVENGE ATTACKS: The United Nations says the Taliban has conducted at least 218 revenge executions against former Afghan military and government officials since seizing power two years ago.
    • Despite millions of dollars in U.S. foreign aid and an alleged general amnesty, the Taliban continues to commit grave human rights violations against former Afghan armed forces personnel.
    • The report also documents some 800 cases of arbitrary arrests, torture, ill-treatment, and enforced disappearances of former government officials.
    • Why It Matters: The idea that the Taliban was a legitimate governing entity that the U.S. could “partner” with was always a Washington delusion. The Taliban-controlled government is dysfunctional, and the country is in dire straits, suffering from food insecurity and economic collapse. Expect the Taliban to generally shirk off the United Nations allegations while continuing to exploit naive Western foreign policy wonks for U.S. cash. Power does not tolerate a vacuum, and foreign powers aligned against the West will likely exploit this governance vacuum in Afghanistan. – M.M.
  • (8) BRICS: XI SKIPS SPEECH ON CHINESE ECONOMIC STRENGTH: Chinese President Xi Jinping skipped his scheduled speech on the strength of the Chinese economy during a business forum at the annual BRICS summit.
    • Chinese Commerce Minister Wang Wentao read Xi’s speech instead, which focused on the enduring strength and growth of the Chinese economy.
    • Why It Matters: China suffers from acute economic and financial issues. Multiple global economic organizations and multinational banks have cut China’s economic growth prospects in what they expect could be a major financial crisis. It’s at least possible that Xi wanted to avoid giving a speech on Chinese economic strength when conditions are likely to worsen over the next year. – M.S.

Low Intensity Conflict SITREP (Next 48 hours)

  • Atlanta, GA – Stop Cop City Georgia Tech is coordinating a Mass Action Against Police Murder Protest outside of the Atlanta Police Department. The protest is scheduled for Thursday, 24 August at 1700 EDT. The Atlanta Police Department is located at 226 Peachtree St. SW Atlanta, GA.


M.S. indicates analyst commentary from Mike Shelby

M.M. indicates analyst commentary from Max Morton

J.V.  indicates analyst commentary from Jared Vaughn

R.C. indicates analyst commentary from Robert Cook

H.B. indicates analyst commentary from Harrison Burge

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